Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Cuomo Raises Pressure on Merrill

He says company faces lawsuit over auction-rate securities

By Nick McMaster, Newser Staff

Posted Aug 15, 2008 5:12 PM CDT

(Newser) – With Wachovia locked in to buying back $9 billion in auction-rate securities from clients, New York Attorney General Andrew Cuomo has his sights set next on finance titans Merrill Lynch and Goldman Sachs, Bloomberg reports. Cuomo says Merrill faces an "imminent" lawsuit after offering to buy back $10 billion of the bonds, which he says is an unsatisfactory amount. The companies are accused of misleading investors.

"There are dozens of firms who've been involved in this area,'' Cuomo said. "We're starting at the top…the larger the firm, the larger the portfolio, the more intense our effort."

[Images (3)]

[Quotes (1)]

Attorney General Andrew Cuomo. (AP Photo)

In this Jan. 26, 2008, file photo, Chief Executive Officer of Merrill Lynch, USA, John Thain speaks during a working session at the World Economic Forum in Davos, Switzerland. (AP Photo)

The corporate logo for Merrill Lynch is shown at an office, Tuesday, July 17, 2007 in New York. (AP Photo/Mark Lennihan)

« Prev« Prev | Next »Next » Slideshow

At the heart of this investigation is the simple goal of returning billions of dollars back into the hands of investors, which in turn injects confidence into the entire market. - Andrew Cuomo

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

AIG Sues Bank of America in Attempt to Recover Billions

Says it was misled about quality of mortgage-backed securities

(NEWSER) - With the Justice Department filing few criminal charges related to the financial crisis, AIG is taking action of its own: The mostly taxpayer-owned firm is preparing to sue Bank of America for allegedly misleading it about the quality of Bank of America's mortgage-backed securities—an accusation that gets to the root of the financial crisis. AIG wants to recoup more than $10 billion in losses in what might be the biggest mortgage securities lawsuit by "a single investor" in history, the New York Times reports. More»

Ernst & Young Hit With Civil Fraud Suit

Andrew Cuomo cites 'massive accounting fraud' in Lehman Bros. dealings

(NEWSER) - Andrew Cuomo filed a civil fraud lawsuit against Ernst & Young today, following reports that the company allegedly helped Lehman Brothers mislead investors . According to the complaint, the accounting firm approved Lehman’s use of “Repo 105” transactions, a type of debt that was labeled as sales to reduce the appearance of risk to investors, and stood idly by while Lehman misled investors and analysts on conference calls, reports the Wall Street Journal . More»

New Probe: Did Banks Dupe Credit Raters?

New York AG Andrew Cuomo investigates 8 big banks

(NEWSER) - More bad news for bankers: New York's attorney general, Andrew Cuomo, is investigating whether banks deliberately misled rating agencies ahead of the housing market collapse. So far, authorities have focused on dealings between banks and clients who purchased mortgage-backed securities, notes the New York Times . Cuomo's crusade broadens the scope by considering the relationship between banks and rating agencies, More»

Lawsuit: Merrill Lynch Did Same Deal as Goldman

Dutch bank points out similarities to US judge

(NEWSER) - Pro Publica has reported that Goldman Sachs wasn't the only bank hawking built-to-fail mortgage investments, and now it has emails accusing Merrill Lynch of the practice. The Dutch bank Rabobank is suing Merrill, and as soon as it saw the charges against Goldman, it sent an email to the US judge in its case, saying that Merrill "engaged in precisely the same type of fraudulent conduct." More»

Other Wall St. Banks as Guilty as Goldman

Many engaged in same activities SEC is now calling fraudulent

(NEWSER) - The SEC's fraud suit against Goldman Sachs might be just the tip of the iceberg, because other investment banks engaged in exactly the same sleight of hand, Pro Publica reports. Goldman is accused of failing to disclose that a hedge fund was both helping to create, and betting against, the investments Goldman was selling. But several other investment banks, including JPMorgan Chase, Merrill Lynch and Citigroup all did the same thing. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Cuomo Raises Pressure on Merrill